Archive for April, 2015

The most generous tax allowance presently available to businesses that encourages direct investment in new plant, equipment and commercial vehicles, is the Annual Investment Allowance (AIA).

If you buy qualifying assets you can write off the expenditure against your taxable profits in the same accounting period. The present limit to this allowance is generous, £500,000.

The AIA is due to reduce from 1 January 2016, and unless Parliament set a new limit from that date, it will revert to a paltry £25,000.

Consequently, business readers who are contemplating an investment in new plant and equipment should take this AIA into account when making a decision to invest.

Entrepreneurs that stand to gain the greater advantage are the self-employed: sole traders, partnerships and LLPs, who may be faced with income charges at the 40% or 45% rates in the tax year 2015-16.

For incorporated businesses and self-employed traders paying tax at the standard rate of income tax, the tax savings will be limited to 20% of qualifying expenditure.

Certainly, we do not advise making investment decisions based solely on any tax advantages that may flow from the investment. Due regard should be taken of the effects on profitability, cash flow and future business growth.

If you would like to discuss how this relief could benefit your business, we would be happy to discuss your options. Planning for large investments is key. Do not make decisions without considering all the effects. Please call if you would like to discuss these matters in more detail.

All of this year’s (2015) winners are UK businesses leading the way in international trade, innovation and sustainable development in a broad range of sectors including car manufacturing, education, software design and fashion.

The Department for Business, Innovation and Skills (BIS) unveiled the 141 winners of the Queen’s Awards for Enterprise and 6 individual recipients of the Queen’s Award for Enterprise Promotion 21 April 2015.

The Queen’s Awards scheme is regarded as the most prestigious business awards in the country and 2015 marks its 50th anniversary.

This year, 105 businesses received awards for international trade; 24 for innovation and 12 for sustainable development. Two small companies, Wavestore Ltd and Hallmarq Veterinary Imaging Ltd, achieved double recognition, receiving awards for both innovation and international trade. In addition, 6 people who were nominated by their peers have been recognised for their efforts to encourage entrepreneurship in the UK with the Queen’s Award for Enterprise Promotion. Winners include entrepreneurs, a professor of creative entrepreneurship and the founder of the Creative Innovation Centre in Somerset.

Winners of the Queen’s Awards for Enterprise are visited by a Royal representative and are presented with a crystal bowl as a mark of their achievement. They are also invited to attend a reception at Buckingham Palace in July 2015. Businesses are also able to use the Queen’s Award emblem in advertising, marketing and on packaging for 5 years.

Firms that won a Queen’s Award for international trade showed they have benefited from substantial international growth in overseas earnings and commercial success within their sector.

Awards for innovation are given to businesses that can demonstrate that their innovative products or services are commercially successful.

Sustainable development winners have to show they are involved in activity that ensures a better quality of life for everyone, now and in the future.

The Queen’s Award for Enterprise Promotion is for individuals who have played an important role in promoting enterprise skills and supporting entrepreneurs.

If you move abroad

If you open an Individual Savings Account (ISA) in the UK and then move abroad, you can’t put money into it after you move (unless you’re a Crown employee working overseas or their spouse or civil partner).

However, you can keep your ISA open and you’ll still get UK tax relief on money and investments held in it.

You can pay into your ISA again if you return and become a UK resident (subject to the current annual ISA allowance of £15,240).

If you die

Your ISA ends on the date of your death. There will be no Income Tax or Capital Gains Tax to pay up to that date but ISA investments will form part of your estate for Inheritance Tax purposes.

Your ISA provider can be instructed to sell the investments and either:

pay the proceeds to the administrator or beneficiary of your estate

transfer the investments directly to them

If your spouse or civil partner dies

If your spouse or civil partner died on or after 3 December 2014, you can inherit their ISA allowance.

As well as your normal ISA allowance, you can add a tax-free amount up to the value they held in their ISA when they died.

Contact your ISA provider or the provider of your spouse or civil partner’s ISA for details.

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On 26 March 2015 the government announced a new initiative to support taxi owners to convert to lower emission vehicles. The initiative is £45 million to support the rollout of greener taxis. A £20 million fund will be made available to local authorities to support the rollout of ultra-low emission taxis across the UK. The money will be available to reduce the upfront cost of purpose built taxis and to install charging infrastructure for taxi and private hire use.

A further £25 million has been set aside specifically for the Greater London Area to help taxi drivers cover the cost of upgrading to a greener vehicle.

All taxis will also qualify for the government’s plug-in car grant, which currently offers up to £5,000 off the cost of an eligible low emission vehicle.

From 26 March local authorities are invited to bid for feasibility studies to prepare for the rollout of these vehicles in their fleets. The news follows Geely’s recent announcement outlining plans for a new £250 million state of the art facility to produce the next generation of low-emission London Black Taxis. Geely, who owns the iconic London Taxi Company, was awarded £17 million from the government’s Regional Growth Fund to build this facility, which will create 1,000 local jobs and ensure the London black taxi continues to be designed, developed and made in the UK.

These new taxis will comply with the new regulations being introduced by the Mayor of London that will require all London taxis to be zero-emission capable from January 2018.

Business Minister Matthew Hancock said:

This is a historic moment for the automotive sector and goes to show that it is thriving in Britain today. Low emission vehicles are the future and show that we can meet our climate change obligations in a way that enhances technology. I’m looking forward to the roll-out of greener taxis across the UK and have no doubt that with the support of Geely this will happen very quickly.

Mayor of London, Boris Johnson, said:

As London strives towards the greenest taxi fleet from 2018, it is essential to support the taxi trade in the transition to cleaner vehicles. With the additional funds announced today, more help is on the way for taxi drivers to upgrade to the latest technology in zero-emission capable cabs. Alongside the world’s first Ultra Low Emission Zone from 2020 these measures will boost jobs and growth in the development and manufacturing of ultra low emission technologies, secure the long-term future of the taxi industry, and ensure everyone who lives, works in, or visits our city has the cleanest possible air to breathe.

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You’re on an emergency tax code if your payslip says your tax code is one of the following:

1060L W1

1060L M1

1060L X

Emergency tax codes are temporary. While you’re on an emergency tax code, you pay tax on all your income above the basic Personal Allowance (£10,600 for the 2015 to 2016 tax year).

If your tax code is just 1060L it’s not an emergency tax code.

Tax code 0T can also be used as a temporary code. It means you don’t get any Personal Allowance you’re entitled to until your tax code is updated.

When you might get an emergency tax code

You may be put on an emergency tax code if you’ve started:

a new job

working for an employer after being self-employed

getting company benefits or the State Pension

Getting the right tax code

Your tax code is usually updated automatically after you’ve given your employer details of your previous income or pension. This is usually from your P45 – if you don’t have one, your employer may ask you to fill in a ‘new starter checklist’.

You’ll be sent your new tax code in a PAYE Coding Notice. HM Revenue and Customs (HMRC) will also tell your employer or pension provider. Your next payslip should show:

your new tax code

adjustments to your pay if you were paying the wrong amount of tax

Please contact us if you are concerned that you may have the wrong tax code and be paying too much tax, or if you receive a Notice of Coding that you don’t understand.